KUALA LUMPUR: The ringgit opened on a stronger note against the American dollar today on renewed buying interest as the US Federal Reserve (Fed) left interest rates unchanged overnight while signalling a rate cut would happen sometime this year.
At 9.05 am, the ringgit strengthened by 130 basis points to 4.7030/7070 versus the greenback from yesterday’s close of 4.7160/7185.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) had been hovering below 105 points last night, indicating a weaker dollar as the markets believe there would be more monetary easing by the Fed.
However, the latest Fed decision and guidance showed that the US central may cut rates only once, contrasting with the previous forecast in March of three reductions. However, the markets appear to be upping their forecasts for two cuts in September and December this year.
"As such, the ringgit should stand to benefit from this with the USD/MYR nearing the RM4.7000 level today,” he told Bernama.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
The local unit was slightly lower versus the Japanese yen to 2.9999/3.0027 from Wednesday’s close of 2.9977/9995, slid against the euro to 5.0863/0906 from 5.0711/0738 and depreciated vis-a-vis the British pound to 6.0189/0240 from 6.0157/0189 previously.
Against its Asean peers, the local note appreciated vis-a-vis the Indonesian rupiah to 288.5/289.0 from 289.3/289.7 at Wednesday’s close and was higher against the Philippine peso at 8.03/8.05 from 8.04/8.05.
However, it eased against the Singapore dollar to 3.4889/4921 from 3.4879/4900 yesterday and fell versus the Thai baht to 12.8719/8881 from 12.8529/8643. - Bernama
